restrictive measures against Iran

Article Date: 05 November 2010

On 27 October 2010 Council Regulation (EU) 961/2010 on restrictive measures against Iran and repealing Regulation (EC) 423/2007 was published in the Official Journal of the European Union (O.J. L281, 27.10.2010, p1) and came into force on that day.

The Regulation implements the measures outlined in Council Decision 2010/413/CFSP of 26 July 2010 that are necessary to comply with UN Security Council Resolution 1929 (2010) as well as imposing additional restrictive measures as requested by the European Council in its Declaration of 17 June 2010.

These restrictive measures comprise, additional restrictions on trade in dual-use goods and technology, equipment which might be used for internal repression; restrictions on trade in key equipment and technology for the Iranian oil and gas industry; restrictions on transfers of funds to and from Iran; restrictions concerning the Iranian banking sector; freezing of assets or funds  against designated entities and restrictions on providing certain services to Iranian ships and cargo aircraft.

2. Main changes

Dual Use and Human Rights

2.1       The restrictive measures contained within the new Regulation comprise those contained within Regulation 423/2007 with additional restrictions on trade in dual use goods and technology, as well as equipment that might be used for internal repression.

2.2       The prohibition on sale, supply, transfer or export directly or in-directly to Iran of dual use goods has been increased from Nuclear Suppliers Group (NSG) and Missile Technology Control Regime (MTCR) listed items from the dual use Regulation, to the whole of Annex I dual use list (except Category 5 goods (which will continue to require a licence) of Regulation 428/2009.

2.3       Equipment that might be used for internal repression detailed under Annex III is now prohibited.

Key sectors of the Iranian oil & gas industry

2.4       New restrictive measures targeting the Iranian oil and gas industry have been implemented. They prohibit the sale, supply, transfer or export of key equipment or technology listed under Annex VI. It is also prohibited to provide either directly or indirectly, technical assistance or brokering services related to the key equipment and technology, or related to the provision, manufacture, maintenance and use of goods listed in Annex VI, to any Iranian person, entity or body or for use in Iran.

2.5       If your equipment does not feature on Annex VI, there is no prohibition to exporting under the oil and gas provisions, but you will need to consider if your goods may be prohibited under any of the other classifications such as dual use.

2.4       If your equipment does feature on Annex VI, then you may be able to claim exemption from the prohibition, if you have qualifying contract.

2.5       If you consider the supply or export of the equipment qualify for the prior contract exemption, to claim exemption, you will need to prove a number of key facts; chiefly that the equipment or technology you intend to supply is demanded by a contract that was in force on or before 26th October 2010.
2.6       The UK requires exporters to notify the Export Control Organisation at least 20 working days in advance of the date a response is required. Notice is required in writing with a copy of the contract, or key excerpts from it via e-mail or post.

Asset freezing and economic resources

2.8       Articles 16-20 of the Regulation replicate previous asset freezing measures. There are no changes to the list subject to these prohibitions. The UK’s Consolidated List of targets of financial sanctions in effect in the UK is unaffected.

2.9       The Regulation clarifies the effect of the asset freezing measures on the Islamic Republic of Iran Shipping Line (IRISL), and of designated entities owned or controlled by IRISL. It is prohibited to load and unload cargoes on and from vessels owned or chartered by IRISL or by such entities in ports of Member States.

2.10    However, the asset freeze imposed on IRISL does not require the impounding or detention of vessels owned by such entities or the cargoes carried by them, nor does it require the detention of the crew.

2.11    Annex VII and VIII contain lists of designated entities who are covered by asset freezing sanctions, as part of these financial sanctions there is also a prohibition on providing economic resources to those entities detailed in the annexes which has not changed.

2.12    Economic resources are defined as assets of every kind which are not funds, but may be used to obtain funds, goods or services. This includes the supply of goods which may be utilised by a designated entity to obtain funds.

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